Mumbai, Delhi NCR, and Bengaluru account for 70% of overall retail leasing activity in the country: JLL

Around 1.1 mn sq ft of retail space in organized retail centers and prominent high streets was leased in Q1 2024; Fashion and apparel sector dominated

Around 1.1 million sq ft of retail space in organized retail centers and prominent high streets was leased in Q1 2024 with Mumbai, Delhi NCR, and Bengaluru collectively accounting for almost 70% of the overall leasing activity, a new report by JLL has said.

Mumbai, Delhi NCR, and Bengaluru collectively accounted for almost 70% of the overall retail leasing activity in the country. (Representational photo) (Pixabay)

Fashion and apparel sector dominates retail store leasing

The fashion and apparel sector dominated retail store leasing in the first quarter of 2024 contributing 40% to the total leasing volume of 1.1 million square feet, the report showed. This surge was led by mid-segment brands, which captured a significant share of 40%, closely followed by value segment brands at 38%, the data showed.

The food and beverage segment contributed to 21% of the leasing activity. Experiential dining brands, delivering unique and memorable dining experiences, accounted for an impressive 38% of the F&B segment.

Others include jewelry, lifestyle, automobiles, banks. Gross leasing included areas leased in retail developments and prominent high streets, it showed.

The data pertains to top 7 cities Delhi NCR, Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai, and Pune.

The report noted that 78% of the upcoming retail supply of around 45 million sq ft is lease-based that allows developers to have greater control over the quality of the tenant mix and day-to-day management of the property, thus enabling them to command higher rentals. As a result, they can curate a diverse mix of tenants that align with their vision for the development.

“The organized retail market in India has witnessed a surge in new developments over the past few years, leading to a heightened velocity of launches across urban centers and emerging cities. This has motivated retailers to expand their footprint into newer micro-markets, bringing them closer to consumers,” said Rahul Arora, Head of Office Leasing & Retail Services, India, and Senior Managing Director (Karnataka, Kerala) JLL.

Domestic brands led the way during Q1

Domestic brands led the way during Q1, capturing a substantial 76% share of the retail leasing activity, the report showed.

Seven international brands opened their first store in the country in Q1 2024, with Delhi NCR and Mumbai emerging as preferred locations. Majority of these brands were in the beauty and cosmetics category, which has experienced unprecedented growth in recent years.

Apart from global brands, leading domestic retail chains have also ventured into this segment. Most of these stores by domestic retailers are Multi Brand Outlets (MBOs) which are also facilitating the entry of global beauty and cosmetics brands into the Indian market.

Furthermore, premium Indian beauty and cosmetics brands are expanding globally, with store openings in cities like Dubai and London, thus broadening their reach in foreign markets.

“Prime retail spaces with high footfall continue to be in robust demand across the nation, as both international retailers and leading national brands display a strong appetite for superior-grade retail developments. Shoppers, too, showcase a clear preference for well-curated tenant mix, robust management, and superior infrastructure. In top-quality retail centres, vacancy levels remain low, hovering around 6%,” said Samantak Das, Chief Economist and Head of Research & REIS, India, at JLL.

Average retail developments experience higher vacancy rates of approximately 20%. Efforts are now underway to revitalize non-performing and poorly managed retail developments, with some being repurposed or transformed to meet evolving market demands, he added.